The shares of Chinese property developer Sunac plunged 26 percent to 1.30 Hong Kong dollars on Friday after the company announced that a liquidation petition had been filed against it in Hong Kong. The petition, filed by a unit of state-owned Cinda Asset Management, is scheduled to be heard in court on March 19, Sunac announced in a statement. Sunac, once one of China's largest property developers, fell into financial difficulties following the collapse of Evergrande in 2021. Evergrande, which at the time was considered the world's most indebted property company with liabilities of over $300 billion, triggered an industry-wide liquidity crisis that paralyzed numerous construction projects in China and continues to burden economic confidence.

A similar liquidation petition against Evergrande was approved by a Hong Kong court last year, even though most of Evergrande's assets are subject to the legally independent Chinese mainland. Also, Country Garden, formerly the largest Chinese developer by revenue, is facing liquidation proceedings. The company proposed a $11.6 billion debt reduction this week. Sunac received the go-ahead for a $10 billion offshore restructuring plan at the end of 2023 and is working in parallel on restructuring its onshore liabilities. Unlike Sunac and Country Garden, most liquidation petitions against indebted developers were filed by private creditors. However, last year the state-owned China Construction Bank filed such a petition against Shimao, another real estate developer.

The Chinese government is trying to stabilize the real estate market with measures such as interest rate cuts on mortgages and the sale of unused properties to state-owned companies. Despite these efforts, the crisis in the real estate sector remains unresolved.